Sunday, February 12, 2006



As the U.S. prepares to mark the third anniversary of the war in Iraq, which still has no end in sight, the national debate is squarely focused on how soon our troops can get out. After all, this is an election year. How can the U.S. military make a dignified exit without appearing weak and without appearing to give up?

But with an ever-brewing civil war growing daily, one that would likely rage out of control without a U.S. military presence, the wisdom of the initial U.S. intervention has to be questioned. It isn't politically correct to ask such questions, but it is reasonable to wonder whether U.S. interests were really served by deposing Saddam Hussein and whether things are truly better in Iraq since then.

The sectarian violence between Sunnis and Shiites plays itself out in an orgy of daily killings and bombings, which simply result in even more reprisal killings. Nothing seems to be sacred or off limits; mosques are frequent targets.

Sure there have been three elections in Iraq, but none of them would have occurred without the U.S. military presence. The parties involved were too busy killing each other to have initiated and carried out those elections without U.S. prompting and assistance. To what end those elections will ultimately result in is anybody's guess.

Anyone who sees a budding democracy in Iraq is blithely, if not naively, optimistic. Furthermore, the valuable counterbalance to Iran has been lost in the Middle East. That poses a whole new set of challenges for the U.S.

The question is, how did it come to this? How did the outcome of the war go so badly? Three years out, its fair and reasonable to start asking those questions, and to be seeking the answers to them. Didn't anyone in charge see this coming?

The answer is, yes. There were adequate warnings from the U.S. intelligence community, but those warnings of instability in Iraq — the power vacuum that would be created in the absence of Saddam — were flatly ignored by the Bush Administration.

Because of key revelations, it is now known that the Bush Administration had an agenda for Iraq and that intelligence was ignored. or even fixed, because of that agenda.

But policy decisions are not supposed to be decided by an agenda, but rather by facts — or at least a well informed, reasoned and objective assessment of intelligence. Clearly, that did not happen.

There have been numerous and repeated accusations and criticisms leveled at the Bush Administration by former insiders, confidants and advisors. Among them are former White House counterterrorism adviser Richard Clarke, former treasury secretary Paul O'Neill, and former U.S. civilian administrator in Iraq, Paul Bremer.

And the hits just keep on coming. In yet another embarrassing public revelation for the President and his advisors, a critical member of the national intelligence team from the start of the Iraq war has made more damning charges.

Before retiring last October, Paul R. Pillar was the national intelligence officer responsible for the Middle East from 2000 to 2005. Specifically, Pillar had provided the C.I.A. with intelligence assessments on Iraq. And he has now accused the Bush administration of ignoring or distorting the prewar evidence on Iraq to justify the American invasion of 2003.

Echoing the criticisms of Clarke and O'Neill, Pillar charges the administration with using selective intelligence regarding Iraq's unconventional weapons, and the chances of postwar chaos in Iraq.

In an article for the March-April issue of Foreign Affairs, Pillar wrote, "If the entire body of official intelligence on Iraq had a policy implication, it was to avoid war — or, if war was going to be launched, to prepare for a messy aftermath. What is most remarkable about prewar U.S. intelligence on Iraq is not that it got things wrong and thereby misled policymakers; it is that it played so small a role in one of the most important U.S. policy decisions in decades."

Pillar continued, "The most serious problem with U.S. intelligence today is that its relationship with the policy making process is broken and badly needs repair. In the wake of the Iraq war it is clear that official intelligence analysis was not relied on in making even the most significant national security decisions, that intelligence was misused publicly to justify decisions that had already been made, that damaging ill will developed between policy makers and intelligence officers, and that the intelligence community's own work was politicized."

Pillar, now a professor at Georgetown University, said he was not contacted by the Bush Administration for an assessment on post-war Iraq until a year after the war began.

From his standpoint, there are valuable lessons to be learned and what is most important now is to, "Look at the whole intelligence-policy relationship and get a discussion and debate going to make sure what happened on Iraq doesn't happen again."

Pillar's rebukes are just the latest in a string of such accusations from insiders. Yet, the Administration attack machine has attempted to disparage most of them by impugning their credibility.

O'Neill, who sat on the National Security Council, had extraordinary access to the President. He says that in the very first Bush Cabinet meeting in January 2001, part of the agenda was for a post-Saddam Iraq.

Even in those early days, deposing the Iraqi leader was already on the mind of the President and some of his advisors.

O'Neill describes a White House poised to overinterpret intelligence:

"From the start, we were building the case against Hussein and looking at how we could take him out and change Iraq into a new country. And, if we did that, it would solve everything. It was about finding a way to do it. That was the tone of it. The President saying, 'Fine. Go find me a way to do this.'"

The events of 9/11 gave them the opening they were hoping for.

O'Neill offers the most skeptical view of the case for war ever put forward by a top Administration official.

"In the 23 months I was there, I never saw anything that I would characterize as evidence of weapons of mass destruction," he told TIME. "There were allegations and assertions by people. But I've been around a hell of a long time, and I know the difference between evidence and assertions and illusions or allusions and conclusions that one could draw from a set of assumptions. To me there is a difference between real evidence and everything else. And I never saw anything in the intelligence that I would characterize as real evidence."

And in his book "Against All Enemies," Clarke revealed that President Bush and senior administration officials wanted to bomb Iraq after 9/11 even though they knew that it had no connection to al Qaeda, and that al Qaeda was responsible for the attacks.

Then, in May of 2005, the Times of London printed the classified minutes of a British cabinet meeting, referred to as the "Downing Street Memo." The memo revealed that, long before the invasion of Iraq, the Bush administration was determined to go to war, intentionally distorting intelligence and lying to the American people.

Taken from a July 23rd, 2002 cabinet meeting — a full eight months before the war — the revealing memo quotes high level British officials discussing recent conversations with the Bush Administration on their decision to invade Iraq, and the manipulation of intelligence to back it up.

Two key excerpts:

Sir Richard Dearlove, Director of the British foreign intelligence service (MI6), reported on his recent meetings in Washington:

Military action was now seen as inevitable. Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy.

Later British Foreign Secretary Jack Straw added:

It seemed clear that Bush had made up his mind to take military action, even if the timing was not yet decided. But the case was thin. Saddam was not threatening his neighbours, and his WMD capability was less than that of Libya, North Korea or Iran.

The British government did not dispute the authenticity or accuracy of the memo.

What the Bush administration told these foreign officials is the exact opposite of what the President repeatedly told Congress and the American people about his decision before the invasion, and what he continues to claim — that he was trying to avoid a war America did not want, and that intelligence about the Iraqi weapons of mass destruction was clear and compelling.

The Bush administration continues to peddle falsehoods about the rush to war and intelligence manipulation, despite overwhelming evidence from former administration officials, and now from our closest allies. Last May, Secretary of State Condoleezza Rice told troops stationed in Iraq, "This war came to us, not the other way around."

Then, last August, George Washington University obtained a State Department memo — issued a month before the start of the Iraq war — that warned military planners about "serious planning gaps" for the post-war period.

The document, dated February 7, 2003, noted that a lack of focus and preparation for adequate policing after the invasion could have negative consequences. Specifically, State Department officials warned that, "A failure to address short-term public security and humanitarian assistance concerns could result in serious human rights abuses, which would undermine an otherwise successful military campaign, and our reputation internationally."

The memo's authors said they had "raised these issues with top CENTCOM officials" and offered to help the military "develop plans for accomplishing these goals." Obviously their appeals went unheeded and they were ignored.

Finally, Paul Bremer, a critical member of the Bush team in the war's early days, agrees that the war planning was flawed from the start. Bremer said "horrid" looting was occurring in May of 2003 when he arrived in Baghdad to head the U.S.- led Coalition Provisional Authority.

"We paid a big price for not stopping it because it established an atmosphere of lawlessness," Bremer said. "We never had enough troops on the ground."

Earlier, Bremer had said the U.S. could have planned better. "The single most important change ... would have been having more troops in Iraq at the beginning and throughout."

Bremer claimed he "raised this issue a number of times with our government," but allowed that he "should have been even more insistent."

Last fall, Virginia's John Warner, the Republican Chairman of the Senate Armed Services Committee, called a meeting with 10 battalion commanders to get an honest portrayal of the situation in Iraq. The Marine and Army officers were quite frank in their assessments.

Contradicting the Pentagon's repeated claims, the commanders said they not only needed more manpower, but that they had also repeatedly asked for it — as recently as last August. Each time, they said, they were denied.

So, it's hard to imagine the withdrawal of U.S. forces from a war in which there have never been enough forces to begin with. Of course there will be vigorous arguments both for and against, just as there have been up to this point, but it will get really interesting, and perhaps even more ugly, in an election year.

These multiple inside accounts are representative of the cavalier and nonchalant attitude that marked the planning and execution of this war from the start.

Pillar's article merely provides the latest example of the irresponsibility and negligence of our war planners.

There has been a total lack of accountability from the outset, and that sort of attitude and behavior is entirely unacceptable. It's time for accountability. It's time for heads to roll. The public should demand it.

With the notable exception of Gen. Eric Shinseki, the former Army Chief of Staff who was wrongly dismissed for having the courage to tell the administration that they didn't have enough troops to successfully fight the war, no key players in the war effort have been fired to date. The General has since been vindicated, but it's too little, too late.

Defense Secretary Donald Rumsfeld, who has mishandled and misjudged this war from the outset, still has his job and that isn't building confidence in anyone — except, perhaps, the equally inept and irresponsible who have managed to keep their jobs as well.

The bungled charade that is the war in Iraq has resulted in the loss of nearly 2300 Americans lives — and there will be more to come. The death toll countinues to mount on an almost daily basis and it is important to remember that the President declared that major combat operations had ended in May of 2006 — just six weeks after the start of the war.

In a time of war, the counry needs — and deserves — more than platitudes and banality. We deserve honesty and truth.

Copyright © 2006 The Independent Report. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.

Thursday, February 09, 2006

Will You Have Enough To Retire?

Last August, the U.S. government reported that the national savings rate is now 0%. It seems incredible, but it's true.

The last time the annual rate was this low was 1934 — during the Great Depression. As recently as 1994 the savings rate was nearly 5 percent, and double-digit savings rates were the norm 25 years ago.

The question is, where did all the savings go? The answer; home purchases. And since household real estate assets have risen by just over two-thirds since 1999, Americans now view their homes almost like ATM machines, using home equity loans and refinancing to pull out cash and support their spending.

In this materialistic and consumer driven society that America is today, people are actually spending more money than they make. So there's nothing left to save.

Every time there is a marginal uptick in incomes, there is a commensurate, or greater, increase in spending. Though this is the height of irresponsibility, it's been the engine for a growing U.S. economy.

In fact, Americans need to keep spending at this frenzied pace just to maintain our economy. Experts say that if everyone were to start saving, the economy would slow considerably — potentially to the point of recession. This is an obvious problem.

Yet, the savings rate will be driven down further when Baby Boomers start retiring and drawing on their retirement savings and the nation will need greater savings to fund the onslaught.

The report about the savings rate is particularly bad news news right now because, coupled with other developments, the retirement future of the average American doesn't look bright. For anyone who thought they could rely on a corporate pension, think again.

Corporate pensions appear to going the way of cassette players and rotary phones.

IBM just opted out, telling employees last month that their pension benefits will be frozen in 2008. And they aren't alone; lots of reasonably healthy companies — Verizon, NCR, Lockheed Martin, Hewlett-Packard, and Motorola, to name a few — already did the same.

It won't be long before most other American corporations follow suit and relieve themselves from their pension burdens. There's been widespread speculation that GM could be next.

As it stands, there have been a few dramatic cases of companies going bankrupt and defaulting on existing pension commitments, such as United Airlines. The problem has gotten lots of press, but that won't change a thing. It's a trend that's been underway for many years.

Defined-benefit pension plans, under which workers receive fixed monthly benefits based on their salaries and tenure, declined from 95,000 in 1980 to 30,000 in 2004 as companies either stopped offering plans or switched to 401(k)-type programs.

For the last two decades, more and more corporations have shifted to 401(k)s that automatically set contribution percentages and investment choices for employees.

Under the guidance of investment professionals (who aren't employed by for-profit mutual fund companies or brokerage firms), employees can determine how much money to set aside and how to invest it.

But while 401(k)s may be fine for younger workers, they don't work for older workers nearing retirement.

That said, we are entering a period in which workers and corporations will battle over the demise of pensions, long the primary source of retirement income for many Americans. But the fight will also involve governments at all levels, regulators, accountants and taxpayers. And these battles will be heated because everyone involved has so much to lose.

The primary problem is an aging population that is living ever longer. Pension costs have sky rocketed due to millions of longer-living retirees, and the problem will only worsen in coming years.

In 1950, when pensions first became common, American life expectancy was just 68. But it has now grown by an additional ten years. Meanwhile, American workers, many of whom are union members, are watching as employers dump or cut their pensions at a time when there's reasonable concern about the future of Social Security. For these workers, retirement security is non-negotiable.

But the pension problem is even worse than most American realize.

Public-employee pensions have never been accounted for like those run by private employers. Governments aren't required to reveal their pension liabilities the way a corporation is, on the theory that governments can simply raise taxes to pay retirees.

But the Governmental Accounting Standards Board, which sets the rules for the public sector, has finally decided to change its regulations. State and local governments will now have to reveal their pension liabilities, which may be underfunded by $1 trillion or more. Gulp.

And the private sector has a mess on its hands as well. Its pension funds are underfunded by $450 billion. Right now, 44 million Americans are relying on these private pensions and they have reason for genuine concern.

The Pension Benefit Guaranty Corporation, which insures the defined-benefit plans for all those people and takes over the plans of bankrupt companies, reported a deficit of $22.8 billion at the end of the 2005 fiscal year. It was the fourth consecutive year that a shortfall had been reported. And the PGBC predicted that its troubles would continue well into the future.

The PBGC had to assume responsibility for the pension benefits of an additional 235,000 workers and retirees in 2005, raising the total to 1.3 million. It also paid benefits of $3.7 billion last year, up from $3 billion in 2004.

When United Airlines and US Airways filed for bankruptcy last year, they forced a combined $9.6 billion in pension liabilities onto the PBGC. Delta Airlines and Northwest Airlines , which both filed for Chapter 11 bankruptcy protection in September, could follow suit.

And then there's the greatest pension crisis of all: Social Security. The hard truth has been hidden by the so-called trust fund, where the plan's annual surpluses are sent to be invested until future need. But since those surpluses are required to be invested in government bonds, they've simply been handed over to the U.S. Treasury and spent by Congress.

The trust fund is a myth. When Social Security's annual surpluses are exhausted in just six or seven years, there will be a panicked struggle over how to cover the plan's obligations.

And the ugly truth about pensions has also remained undisclosed for decades. Now, as the first baby-boomers turn 60, that reality must finally be confronted — and it will get ugly.

Many financial experts see pensions as an inherently unstable, unfair and economically unrealistic means of providing for retirement.

Though they've existed since the 19th century, the corporate pension became a retirement staple in the United States following World War II. But American corporations didn't foresee pension commitments becoming such a heavy burden for companies dealing with stiff foreign competition and longer living retirees.

Many economists argue that if companies had invested in individual retirement accounts for their employees in previous decades, instead of putting that money into pension plans, they wouldn't be facing this problem. Though IRAs and 410(k)s didn't exist until the 1970's, the general point is true.

The problem with pension plans is that they promise a specific benefit in the future without knowing the affordability of those benefits at that time. In essence, pensions are a contract between current and future generations, much like Social Security. And, as with Social Security, those future generations aren't represented at the bargaining table.

As a result, the current generation of workers are guaranteeing the retirement income of older Americans with no guarantee of anything in return.

When succeeding generations are smaller than the ones whose retirements they are helping to fund, they face tremendous and unfair burdens. As a result, the Social Security system and American corporations are facing similar difficulties.

But there are many more Americans with no pension, no 401(k) and no savings to speak of. And without that additional support, no one will survive on Social Security alone. The American retirement system is crumbling, and not nearly enough is being done to rectify it.